Why is there bad news ahead for bricks and blocks?

Since the peak of the building blocks market in 2003, the industry has seen a fall in demand. The only respite was in 2007 when the market increased 2%.

However, sales began to fall at the end of last year.

These are some of the findings of a bi-annual report published by BDS Marketing Research, which adds that the indications in 2008 suggest a significant fall in demand this year, with March being particularly disappointing.

A total of 10 building block plants have closed in recent years as the industry adjusts to lower volumes.

The report says the growth of flats and apartments now appears to have reached a peak. A move back towards houses will benefit building block companies. However, uncertainty over the housing market as a whole - a key sector for block suppliers - could affect block companies for the next 12 months.

Tarmac continues as the largest building block company, with a near-20% share of the market.

The top five companies identifited by BDS are Hanson, H&H Celcon, Cemex and Aggregate Industries, which together are estimated to have about 60% of the market.